Rhodes: Market for luxury real estate on the rise

Written by Engel & Völkers on 8/24/15

The real estate market on Rhodes is stabilising now that Greece’s future in the Euro seems secure. Even before the referendum, Engel & Völkers had managed to expand on its market position despite the difficult economic climate. In the first four months of 2015, it recorded a 45 percent rise in revenues over the same period in the previous year. At the same time, enquiries for high-end residential property increased by approximately 20 percent. “The financial crisis has had a weaker impact on the price structure of the luxury second home market on Rhodes than on the market for first homes. Luxury holiday residences did drop in value slightly during the crisis. But prices are now on the rise again, thanks to the high demand. From this point of view, now really is the best time to invest in Greek real estate,” commented Georg Petras, Licence Partner at Engel & Völkers on Rhodes. This is confirmed by the Market Report 2015 for Rhodes just published by Engel & Völkers.

Demand is directed at exclusive villas and homes, particularly those close to the coast with direct sea access or exceptional views. Properties with three or more bedrooms, exclusive fittings and substantial land plots are attracting the greatest interest. Buyers of top-end homes in a prime location on Rhodes are procuring a stable asset investment with potential for appreciation in value, in addition to an investment in quality of life, security and retirement provision.

Prices for luxury real estate on Rhodes set to increase

The trend towards rising prices for luxury properties on Rhodes is already manifesting itself on the island’s east coast: Compared to the previous year, Engel & Völkers registered a rise in top prices of 500 euros per square metre to 3,000 euros per square metre for properties with sea views. In the south of Rhodes, prices range from 1,000 euros per square metre for traditional houses to 4,000 euros per square metre for villas with park-like land plots. In the island’s prime real estate hotspot Lindos, prices start at 2,500 euros per square metre and are reaching top prices per square metre in excess of 6,000 euros. The centre and suburbs of the town of Rhodes are particularly popular with first home buyers. Prices for existing properties at central addresses range here from 1,600 to 3,500 euros per square metre.

The market for luxury and upmarket second homes must be analysed as a separate entity to the Greek housing market as a whole. In the majority of cases, the owners of holiday homes and luxury residences are wealthy foreigners or Greek expats. They usually acquired their property with little or no borrowed capital and are therefore under no pressure to sell in most instances. This fosters a natural stabilising out of prices. The greatest number of enquiries for second homes on Rhodes comes from Germany, Austria and Switzerland. There are also interested parties based in the UK, other central European countries and non-EU nations however. Additional impetus has also come from the island’s flourishing tourism industry. A further increase in 2015 is anticipated as well, buoyed by the announcement of even more flight connections.

Arguments in favour of buying a home on Rhodes

Prestigious homes in good and very good locations are scarce in number, due to the mere fact that Rhodes is an island. Depending on the location and price, the average time to market is six to twelve months. Non-EU citizens buying a property worth upwards of 250,000 euros are granted a residency permit for five years in Greece. This can be extended indefinitely as long as the claimant remains in ownership of the property. The long-established land registry office ensures that ownership rights are unequivocal, unlike many other regions in Greece. Moreover, the land transfer tax of just 3 percent, introduced at the beginning of 2014, has brought momentum to the market.